Latest news with #miselling
The Independent
5 days ago
- Automotive
- The Independent
Martin Lewis gives major update on car finance scandal with £950 payouts owed
Martin Lewis has issued a major update in the landmark car finance mis-selling case that could see millions of drivers paid substantial compensation. The Financial Conduct Authority (FCA) has confirmed it is launching a consultation on a compensation scheme which it says could cost finance lenders up to £18 billion. A Supreme Court ruling on Friday (1 August) found that lenders are not liable for hidden commission payments in car finance schemes, a decision which means most of the claims will not go ahead, but only the most serious claims will be eligible for compensation. But many cases in a separate strand of the car finance mis-selling case, which was not part of the Supreme Court ruling, are still likely to receive payouts. The FCA is now urging those who believe they may be affected and have not already complained to do so now. Mr Lewis has launched a tool through his Money Saving Expert service to help people do this. Both he and the financial regulator are also warning people against signing up to a claims management company to support their complaint at this stage. This is because the redress scheme will like be automatic and require lenders to get in touch with those affected directly. If an agreement has already been made with a claims firm when this happens, the individual may have to pay up to 30 per cent of their compensation to them, despite the firm not needing to do any work. Here's everything you need to know about the situation: Am I eligible for the car finance compensation scheme? Mr Lewis explains that there are 'two strands' of the car finance mis-selling case. Discretionary Commission Arrangements (DCAs), which Mr Lewis says will be the main form of compensation to come out of the consultation, were not involved in the Supreme Court case, he said. 'The one most people have complained about wasn't involved in the Supreme Court decision, although it was on hold just in case anything in that decision caused a wobbler for DCAs,' Mr Lewis added. DCAs were banned in January 2021, so anyone with a personal contract purchase (PCP) or Hire Purchase (HP) deals before then, is likely to have unknowingly agreed to one. 'It is when you went to a car broker or dealer and it increased the amount of interest that you were charged to increase the amount of commission without telling you,' Mr Lewis explained. Those who had PCP or HP deals are 'likely to get compensation under this scheme'. But Mr Lewis notes that those who had 0 per cent interest, or whose commission was very small, are unlikely to receive compensation. But he says that for most people, the compensation will be in the hundreds of pounds. The other strand of the mis-selling case is the one element of the Supreme Court case which was upheld by the court - with the other two being dismissed. This refers to commissions which were 'manifestly unfair', Mr Lewis explained, adding that it is harder to define because it was done on a case-by-case basis. Factors in the payout may even include how vulnerable you are - and whether it is therefore seen as more unfair for the commission to have been so high. As this is done case-by-case and it is not a blanket issue like the DCA cases, it is unclear how the compensation scheme will work for these, Mr Lewis said. How much could I be compensated? The FCA estimates that most individuals making claims will receive 'less than £950 in compensation per agreement'. The final cost of a compensation scheme will depend on the final design which it takes, the FCA added in its statement earlier today. The first payments are forecast to be made in 2026. For DCA cases, the maximum you could receive is all of the commission you paid, Mr Lewis said. It is more likely you will be paid the higher interest rate you were charged minus the standard interest rate. A simple interest - meaning the interest is calculated on the original amount of the loan - of roughly 3 per cent per year will be added on top of the payout, Mr Lewis added. 'The very high likelihood is that many people who had a discretionary commission arrangement where they were charged more interest than they should have been will get back a chunk of that in the hundreds of pounds at some point in 2026,' he said. But the expert warned that the industry could 'fight this hard', before he urged industry members to accept the 'fair compromise'.
Yahoo
6 days ago
- Automotive
- Yahoo
Swindon drivers in line for £10m pay out over mis-sold car finance
Residents living in Transport Secretary Heidi Alexander's constituency in Swindon could be set to receive millions following the UK Supreme Court decision on car finance. Courmacs Legal, a leading consumer rights law firm based in Blackburn, today responded to the UK Supreme Court's decision in Hopcraft, Johnson and Wrench. Courmacs Legal is currently representing over 1.5 million car finance victims and is dealing with 4 million claims in relation to motor finance mis-selling and allegations associated with civil bribery and hidden commissions. It has calculated how many claims it is handling from constituents living in the areas represented by each cabinet member. And in South Swindon, the area represented by Heidi Alexander, there are 5,471 claims worth an estimated £10,903,924 Darren Smith, Managing Director of Courmacs Legal, said: "The Court has ruled on the position in relation to certain types of commission arrangements. It has not ruled on the position where a discretionary element was applied to the commission. "It is even more important now that lenders make clear to customers the nature of their agreements, and whether they were discretionary. "This still leaves many victims who will be entitled to redress, but the story does not end here. "The next chapter will be in September when the Court of Appeal will be hearing a case relating to the way the Financial Services Ombudsman has dealt with discretionary commission arrangements. The FCA have itself identified this case as being relevant to the actions they may take, so we call on the Government, the Regulators, the Lenders and their associations to allow the judicial process to be completed and to respect the rule of law before seeking to interfere in any way with the redress that these victims may be owed." For more information, and to help you determine whether you are eligible to claim, visit: Courmacs Legal is dealing with claims across all the UK's 650 parliamentary constituencies, including the following car finance cases in Labour Cabinet members' constituencies: Rachel Reeves (Chancellor of the Exchequer): 5,053 claims worth an estimated £10,080,735 Sir Keir Starmer (Prime Minister): 1,488 claims worth an estimated £3,794,771 Angela Rayner (Deputy Prime Minister): 6,483 claims worth an estimated £13,490,847 Shabana Mahmood (Justice): 3,245 claims worth an estimated £6,954,263 Heidi Alexander (Transport): 5,471 claims worth an estimated £10,903,924 Ed Miliband (Energy Security and Net Zero): 7,267 claims worth an estimated £15,588,308 Jonathan Reynolds (Business and Trade): 7,513 claims worth an estimated £16,148,462 John Healey (Defence): 6,806 claims worth an estimated £14,469,650 Ian Murray (Scotland): 3,497 claims worth an estimated £7,540,811 The case is financed by a third-party litigation funder and is fully insured. There is no cost to individuals taking part and no cost if the case is unsuccessful.
Yahoo
03-08-2025
- Automotive
- Yahoo
Martin Lewis explains how to claim car finance mis-selling compensation as FCA predicts payouts worth up to £950
Financial expert Martin Lewis has advised on the next steps for drivers who were mis-sold car loans, after a financial regulator said the industry could pay out up to £18bn in compensation. The Financial Conduct Authority is launching a compensation consultation which will determine how much is paid out to millions of people who paid more interest than they knew about. A Supreme Court ruling on Friday (1 August) found that lenders are not liable for hidden commission payments in car finance schemes, a decision which means most of the claims will not go ahead, but only the most serious claims will be eligible for compensation. But many cases in a separate strand of the car finance mis-selling case, which was not part of the Supreme Court ruling, are still likely to receive payouts, Mr Lewis explained. Am I eligible for the compensation scheme? Mr Lewis explains that there are 'two strands' of the car finance mis-selling case. Discretionary Commission Arrangements (DCAs), which Mr Lewis says will be the main form of compensation to come out of the consultation, were not involved in the Supreme Court case, he said. 'The one most people have complained about wasn't involved in the Supreme Court decision, although it was on hold just in case anything in that decision caused a wobbler for DCAs,' Mr Lewis added. DCAs were banned in January 2021, so anyone with a personal contract purchase (PCP) or Hire Purchase (HP) deals before then, is likely to have unknowingly agreed to one. 'It is when you went to a car broker or dealer and it increased the amount of interest that you were charged to increase the amount of commission without telling you,' Mr Lewis explained. Those who had PCP or HP deals are 'likely to get compensation under this scheme'. But Mr Lewis notes that those who had 0 per cent interest, or whose commission was very small, are unlikely to receive compensation. But he says that for most people, the compensation will be in the hundreds of pounds. The other strand of the mis-selling case is the one element of the Supreme Court case which was upheld by the court - with the other two being dismissed. This refers to commissions which were 'manifestly unfair', Mr Lewis explained, adding that it is harder to define because it was done on a case-by-case basis. Factors in the payout may even include how vulnerable you are - and whether it is therefore seen as more unfair for the commission to have been so high. As this is done case-by-case and it is not a blanket issue like the DCA cases, it is unclear how the compensation scheme will work for these, Mr Lewis said. What should I do next? For those that are unsure whether they are eligible, Mr Lewis advises putting in a complaint to see whether you had a DCA. 'If you're one of those people who have already had a letter saying that your car finance firm, after you complained, won't deal with it until December this year, that will almost certainly be delayed until next year,' he said. The FCA is advising consumers who believe they may have paid too much should complain now, and advise against using Claims Management Firms (CMC) or law firms, which could cost up to 30 per cent of any compensation fees received. Lenders will have to contact customers, and either automatically pay out consumers or consumers will have to opt into a scheme for compensation, meaning receiving compensation will be 'very simple to do', Mr Lewis explained. Therefore, CMCs and law firms could take 30 per cent of the compensation without doing any work. Mr Lewis' money advice website MoneySavingExpert offers a free tool which will do a template complaint for you for DCAs. How much could I be compensated? The FCA estimates that most individuals making claims will receive 'less than £950 in compensation per agreement'. The final cost of a compensation scheme will depend on the final design which it takes, the FCA added in its statement earlier today. The first payments are forecast to be made in 2026. For DCA cases, the maximum you could receive is all of the commission you paid, Mr Lewis said. It is more likely you will be paid the higher interest rate you were charged minus the standard interest rate. A simple interest - meaning the interest is calculated on the original amount of the loan - of roughly 3 per cent per year will be added on top of the payout, Mr Lewis added. 'The very high likelihood is that many people who had a discretionary commission arrangement where they were charged more interest than they should have been will get back a chunk of that in the hundreds of pounds at some point in 2026,' he said. But the expert warned that the industry could 'fight this hard', before he urged industry members to accept the 'fair compromise'.
The Independent
03-08-2025
- Automotive
- The Independent
Martin Lewis explains how to claim car finance mis-selling compensation as FCA predicts payouts worth up to £950
Financial expert Martin Lewis has advised on the next steps for drivers who were mis-sold car loans, after a financial regulator said the industry could pay out up to £18bn in compensation. The Financial Conduct Authority is launching a compensation consultation which will determine how much is paid out to millions of people who paid more interest than they knew about. A Supreme Court ruling on Friday (1 August) found that lenders are not liable for hidden commission payments in car finance schemes, a decision which means most of the claims will not go ahead, but only the most serious claims will be eligible for compensation. But many cases in a separate strand of the car finance mis-selling case, which was not part of the Supreme Court ruling, are still likely to receive payouts, Mr Lewis explained. Am I eligible for the compensation scheme? Mr Lewis explains that there are 'two strands' of the car finance mis-selling case. Discretionary Commission Arrangements (DCAs), which Mr Lewis says will be the main form of compensation to come out of the consultation, were not involved in the Supreme Court case, he said. 'The one most people have complained about wasn't involved in the Supreme Court decision, although it was on hold just in case anything in that decision caused a wobbler for DCAs,' Mr Lewis added. DCAs were banned in January 2021, so anyone with a personal contract purchase (PCP) or Hire Purchase (HP) deals before then, is likely to have unknowingly agreed to one. 'It is when you went to a car broker or dealer and it increased the amount of interest that you were charged to increase the amount of commission without telling you,' Mr Lewis explained. Those who had PCP or HP deals are 'likely to get compensation under this scheme'. But Mr Lewis notes that those who had 0 per cent interest, or whose commission was very small, are unlikely to receive compensation. But he says that for most people, the compensation will be in the hundreds of pounds. The other strand of the mis-selling case is the one element of the Supreme Court case which was upheld by the court - with the other two being dismissed. This refers to commissions which were 'manifestly unfair', Mr Lewis explained, adding that it is harder to define because it was done on a case-by-case basis. Factors in the payout may even include how vulnerable you are - and whether it is therefore seen as more unfair for the commission to have been so high. As this is done case-by-case and it is not a blanket issue like the DCA cases, it is unclear how the compensation scheme will work for these, Mr Lewis said. What should I do next? For those that are unsure whether they are eligible, Mr Lewis advises putting in a complaint to see whether you had a DCA. 'If you're one of those people who have already had a letter saying that your car finance firm, after you complained, won't deal with it until December this year, that will almost certainly be delayed until next year,' he said. The FCA is advising consumers who believe they may have paid too much should complain now, and advise against using Claims Management Firms (CMC) or law firms, which could cost up to 30 per cent of any compensation fees received. Lenders will have to contact customers, and either automatically pay out consumers or consumers will have to opt into a scheme for compensation, meaning receiving compensation will be 'very simple to do', Mr Lewis explained. Therefore, CMCs and law firms could take 30 per cent of the compensation without doing any work. Mr Lewis' money advice website MoneySavingExpert offers a free tool which will do a template complaint for you for DCAs. How much could I be compensated? The FCA estimates that most individuals making claims will receive 'less than £950 in compensation per agreement'. The final cost of a compensation scheme will depend on the final design which it takes, the FCA added in its statement earlier today. The first payments are forecast to be made in 2026. For DCA cases, the maximum you could receive is all of the commission you paid, Mr Lewis said. It is more likely you will be paid the higher interest rate you were charged minus the standard interest rate. A simple interest - meaning the interest is calculated on the original amount of the loan - of roughly 3 per cent per year will be added on top of the payout, Mr Lewis added. 'The very high likelihood is that many people who had a discretionary commission arrangement where they were charged more interest than they should have been will get back a chunk of that in the hundreds of pounds at some point in 2026,' he said. But the expert warned that the industry could 'fight this hard', before he urged industry members to accept the 'fair compromise'.
The Independent
01-08-2025
- Automotive
- The Independent
Martin Lewis explains car finance mis-selling case as Supreme Court to deliver verdict
Martin Lewis has explained what the car finance mis-selling case is as the Supreme Court is set to deliver its verdict. The judgement will be delivered on Friday afternoon, which could pave the way for a massive redress scheme potentially affecting millions. It will rule on a shock Court of Appeal ruling last autumn that all car finance agreements with hidden commission were unlawful. The outcome of the ruling could have major consequences for the industry, with the FCA telling the Supreme Court last year that almost 99 per cent of the roughly 32 million car finance agreements entered into since 2007 involved a commission payment to a broker.
